AU Small Finance Bank gains on launching QIP issue

AU Small Finance Bank rose 2.34% to Rs 1260 after the company launched a qualified institutional placement (QIP) of equity shares on Tuesday (9 March 2021).

The capital raising committee of the board of directors of the bank, at its meeting held on 9 March 2021, authorised the opening of the QIP issue and approved the floor price of Rs 1181.06 per equity share, the small finance bank said in a regulatory filing made after market hours yesterday.

The floor price is at 4.08% discount to AU Bank's closing price of Rs 1231.25 recorded yesterday.

The capital raising committee of the bank will meet on Monday, 15 March 2021, to determine the QIP issue price.

AU Small Finance Bank did not disclose the amount it has proposed to raise through QIP. In May last year, the bank's board had approved a plan to raise Rs 2,500 crore, which it said would be mobilised through QIPs or other such instruments.

In its draft placement document filed with the bourses, the bank said that it proposes to utilize the net proceeds for supporting the long term growth aligned to bank's internal risk appetite, to maintain sufficient headroom over and above the regulatory capital adequacy requirements and for general corporate requirements or any other purposes.

AU Small Finance Bank operates as a commercial bank. The bank offers financial products and services such as savings and current accounts, term deposits, debit cards, insurance, government banking, retail loans, and microfinance lending.

The bank's standalone net profit jumped 151.9% to Rs 479.02 crore on 51.2% rise in total income to Rs 1924.53 crore in Q3 FY21 over Q3 FY20.

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